Getting out of debt takes time and a solid plan.  It doesn’t happen overnight and needs staying power.  The best program should be tailored to each person’s individual situation; however, here is a general guide – one that should be adjusted to fit your financial situation.

The worst thing you can do if you feel like you’re drowning in debt is, ‘nothing’. The longer you leave the problem, the harder it will be to sort things out. If you’re feeling overwhelmed by the situation or not confident enough to approach your lenders on your own, think about asking someone else (e.g. a lawyer, financial counselor or even a family member or friend) to come with you or act on your behalf.

1. Acknowledge the problem. The first step is admitting you have a problem which is caused by spending money that you don’t have.   The good news is that you can control your spending by making a plan and slowly getting out of debt.   Now set aside just 30-60 minutes a week to deal with your finances and ensure that you keep this as a priority.
   
   
2. Stop any non essential purchases. If you have a major problem with credit cards, cut them up.  What’s essential? Obviously your bills, housing, car, petrol, groceries are essentials.  Clothing, CDs, DVDs, books, magazines, gadgets are non-essentials.
   
   
3. Make small cutbacks.  Take a look at things you normally buy and see if you can cut out a few of them, or spend less on them.   Purchase house brand groceries instead of name brands.    Pack your work and school lunches instead of purchasing them.  Add up what your cutbacks will save you this month.
   
   
4. Start an emergency fund.   Set up a fee-free savings account, if you don’t have one already, for an emergency fund.   Take the amount you saved in the small cutbacks that you have made and set up a regular automatic deposit from your general account to this emergency fund savings account for this amount. It’s important that before you start paying off debt, you have at least a small emergency fund for when unexpected expenses come up.    The emergency fund protects your debt payments when these unexpected payments occur.  Aim for $1000 to start with.
   
   
5. Take stock.  Use a spreadsheet to list all of your debts, the amount owning on each debt, the minimum monthly payment, and the applicable interest rate on each debt. Total up the second and third columns to see your total debt owed and how much you have to pay, at a minimum, towards debt each month.
   
   
6. Make a spending plan.  Similarly to the budget planner to list all your regular household bills (everything that is a regular expense).  Then list variable expenses (things that change every month) like groceries, petrol, eating out, etc. Write down the amounts for each, keeping sure that you put enough down so that you don’t leave yourself short.  Be sure to also include your minimum debt payments and your emergency fund deposit.  If the expenses are greater than the income, you will need to make adjustments until the expenses are equal to or less than the income.
   
   
7. Control spending. If you have difficulties keeping track of your spending first make a payment into your emergency fund account then make debt payments.  After this, attend to your monthly bills.  Continue to cut back on non-essential spending as much as you can at this point, so you’re able to stick within your spending plan.
   
   
8. Pay bills on time.  It is important to get into the habit of paying your bills on time. A great ideas is to keep all your bills to be paid in a manila file and all the bills that have been paid (and the corresponding receipts) in a separate manila file.  Keep a spreadsheet of both your regular bills when they come in and agreed debt payments.   In this way, you will be clearly able to see what is still left to be paid at any given time.  Often, paying your bills on time attracts discounts. 
   
   
9. Grow your income.   The more money you earn the faster you will be out of debt.   A great idea is to take a second job.  You could even send out flyers throughout the neighborhood to attract people that want odd jobs done like ironing, mowing, odd jobs, babysitting etc.  Whatever the case, make sure that you apply all your new income to your outstanding debts.
   
   
10. Track your progress. On your debt spreadsheet, be sure to update it every payday (or however often you pay debt) so that you can see your shrinking debt amount. You should be able to calculate how many months you have left before you’re completely out of debt.  Don’t get discouraged, remember that this is not a short term fix – but you will get through it.

Finally, take a hard look at your income and determine if there are ways for you to make more money at least until you have your finances in check. If you have poor budgeting habits, making more money isn't going to be the silver bullet to answering all your woes. Unless you change your spending habits, you will find yourself in a vicious cycle and working really hard to get there.